The 2019 / 2020 Brickell Real Estate Forecast

The 2019 Brickell Real Estate Forecast

The 2019 Forecast for Brickell Condos

We expect the entire market to experience continued downward pressure on property values.

Correctional drops of 20% – 30% of original sale prices are possible. In some cases we will even return to 2013 price levels.

Buildings that will depreciate the most are the new products that finished in the last 2 to 3 years that have very generic and standard finishes (many of them range in size between 1,300 and 1,500 SF). The larger units will be less affected.

The area that will be best protected is Brickell Key, which is the most robust market.

High floor, large and direct waterfacing units as well as Penthouses will remain to fare better and keep better levels of immunity than the rest of the pack.

The rental market will continue to grow as rental rates remain stable and in some cases will drop. With softening prices on the rental market we will see continued appeal for the rental market.

Using the human body as the perfect metaphor, this neighborhood health score indicates the current economic health of an area and its likelihood to fall ill or to be susceptible to illnesses. It measures the market’s elasticity; it is about robustness and resilience of the market against economic change.

Advice for Brickell Buyers

The best deals are to be had in the $500K – $700K market. This is the price range of the most generic Brickell products. If you are an investor in this price range you will be able to pick up some excellent properties at heavily discounted prices. This will be a long- term play though, meaning you need to keep the condo until the next real estate cycle, in order to generate a good profit. Focus on sellers from countries with deflated economies as these sellers can be particularly receptive to lower than average offers on account of currency fluctuations. We have techniques to recognize these sellers, so please call for more specifics.

Other good opportunities exist within the market of (mainly) large, luxury units with water views. A good lesson to be learned by Warren Buffett: “Be fearful when others are greedy and greedy when others are fearful”. This is the time to be bold and make low offers as we experience highly motivated sellers willing to take significant discount on their properties. Do not expect big discounts in the sub $400K market, as this is the entry level in the Brickell market.

Brickell buyers may also consider opportunities that exist in Downtown and Edgewater. These areas offer better, more exaggerated opportunities in some cases.

Very little REAL luxury product exists in the Brickell market. There is Four Seasons, Santa Maria, Asia and Carbonell, but these are now somewhat dated. Best turn your attention to Key Biscayne or more likely Coconut Grove for luxury product over $3M. There has been attempts at luxury in the form of Echo and Una, but these we feel have missed the mark. Potential interest could focus buyers on Flatiron, but its entry into the market comes at a particularly difficult time. Call me for more specifics on this market and consider reading our previous Brickell Reports.

Advice for Brickell Sellers

If you are a seller who bought a new condo in the 2015/2016 peak, do not expect to be able to come out of this at the same price that you bought for. If you are on the fence on whether to sell or not, be aware that if you decide to keep, you will need to hold it for potentially 2-3 years or more to come out better. Recognize that break-even calculations are not truly break- even due to lost investment opportunity and inflation. If you do sell and need to keep real estate assets, move your money into the primary residential markets (Eg Coral Gables, Coconut Grove, Pinecrest).

Please contact the David Siddons Group for more information on the Brickell Condo Market

David Siddons | +1.305.508.0899 | david@siddonsgroup.com

The David Siddons Group is a top-performing Miami real estate group with nearly $100M in yearly sales. David is known as a market analyst and he is the author of several of Miami’s most groundbreaking real estate reports.

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